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Concept Introduction:
Fixed Cost: This refers to the constant cost which does not vary as the quantity produced of a good or service changes. It remains the same at any level of production.
Average Fixed Cost: This refers to the fixed cost per unit at a particular level of production. It shall be calculated as follows:
Variable Cost: This refers to the cost which is not fixed and varies as the quantity of a good or service produced changes.
Total Cost: This refers to the entire cost incurred in the production of goods or services, whether fixed or variable. It shall be calculated as follows:
Marginal Cost: This refers to the change in the cost which is incurred when an additional unit of any good or service is produced. It shall be calculated as follows:
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- (d) Calculate the total change in qı. Total change: 007 (sp) S to vlijnsi (e) B₁ is our original budget constraint and B2 is our new budget constraint after the price of good 1 (p1) increased. Decompose the change in qı (that occurred from the increase in p₁) into the income and substitution effects. It is okay to estimate as needed via visual inspection. Add any necessary information to the graph to support your 03 answer. Substitution Effect: Income Effect:arrow_forwardeverything is in image (8 and 10) there are two images each separate questionsarrow_forwardeverything is in the picture (13) the first blank has the options (an equilibrium or a surplus) the second blank has the options (a surplus or a shortage)arrow_forward
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